Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data
Wages in domestically- owned Indonesian manufacturing plants taken over by foreign firms increased sharply between the year before takeover and two years after takeover, relative to plants remaining in domestic ownership. Blue- collar wage levels in these plants had been less than 10 per cent above and white- collar wages more than 10 per cent below those in their industries a year before takeover. Two years after takeover both were more than 50 per cent above average. Wages in foreign plants taken over by domestic owners tended to rise less than average for their industries, although they remained above the domestic average. Thus, foreign firms did not select particularly high- wage plants to take over and it was foreign takeovers, rather than takeovers in general, that led to large wage increases and high wages. An econometric analysis of the whole panel found that both foreign ownership throughout the period and foreign takeover resulted in higher wages relative to domestically- owned plants. The wage effects for white- collar employees were typically around twice those for blue- collar employees. Foreign takeovers were associated with large increases in blue- collar employment and both foreign and domestic takeovers with declines in white- collar employment. However, the employment changes were not strongly related to the wage changes.
|Date of creation:||01 Dec 2002|
|Date of revision:|
|Publication status:||Published in Economic Development and Cultural Change, 2006, pages 201-221.|
|Contact details of provider:|| Postal: |
Web page: http://www.hhs.se/en/Research/Institutes/EIJS/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aitken, B. & Harrison, A. & Lipsey, R.E., 1995.
"Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States,"
95-21, Columbia - Graduate School of Business.
- Aitken, Brian & Harrison, Ann & Lipsey, Robert E., 1996. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," Journal of International Economics, Elsevier, vol. 40(3-4), pages 345-371, May.
- Brian Aitken & Ann Harrison & Robert E. Lipsey, 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela and the United States," NBER Working Papers 5102, National Bureau of Economic Research, Inc.
- Robert E. Lipsey & Fredrik Sjoholm, 2001. "Foreign Direct Investment and Wages in Indonesian Manufacturing," NBER Working Papers 8299, National Bureau of Economic Research, Inc.
- Huizinga, H.P., 1990.
"Unions, taxes and the structure of multinational enterprises,"
Other publications TiSEM
8cd298e3-9d99-4d59-871e-d, Tilburg University, School of Economics and Management.
- Huizinga, Harry, 1990. "Unions, taxes and the structure of multinational enterprises," Economics Letters, Elsevier, vol. 34(1), pages 73-75, September.
- Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
- Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258 National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:hhs:eijswp:0166. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nanhee Lee)
If references are entirely missing, you can add them using this form.